Two conservative advocacy groups say a sting video shot at a state welfare office illustrates just how easy it is for someone to commit fraud in the Medicaid system. Unveiled today at a news conference, the video shows a state worker advising an applicant about ways to obtain welfare benefits, even though the applicant describes himself as being in the pharmaceutical business and wealthy enough to drive a Corvette. But Gov. Paul LePage has an entirely different take on the video.

By now, the state Health and Human Services worker known only as "Diane" is probably wishing she had taken February 18th as paid time off. That was the day that an actor walked into her office with an undercover camera to apply for welfare benefits.

The actor tells Diane that his name is Ted Ceanneidigh. He says he has turned his family's fishing business in Gloucester, Mass. into a successful pharmaceutical import enterprise. He says his fishing boat is named the Bob Marley, after the marijuana-smoking reggae musician from Jamaica. And he shows Diane a business card that features the Irish flag and a marijuana leaf.

He also tells her he drives a Corvette, and that even though he can afford private insurance, he would like to apply for MaineCare. Then Diane offers Ceanneidigh some advice when the conversation turns to the requirement that an applicant have no traceable income.

Clip from the video:

Diane: "You don't have to go to into details. You don't have a paycheck. You don't file taxes. You have no income."

Ceanneidigh: "So when they see my Corvette, they're not going to say anything?"

Diane: "They probably won't see your Corvette."

Ceanneidigh: "So I just don't say anything about it?"

Diane: "You just don't say it, okay?"

The video was produced by James O'Keefe. If that name sounds familiar, it's because he's perpetrated these types of stings before. O'Keefe is a 27-year-old conservative activist who turned his hidden camera on caseworkers at Planned Parenthood, employees at the low-income advocacy group known as ACORN and even fundraising executives at National Public Radio, and went on to produce some heavily-edited videos that embarrassed his subjects.

Lance Dutson, CEO at the Maine Heritage Policy Center, and Carol Weston, of the Maine chapter of Americans for Prosperity, showed the video at a State House press conference. Weston says O'Keefe approached her with the video a week ago, and after sharing it with Gov. Paul LePage, she and Dutson wanted all Mainers to know that the video reinforces the long-held positions of both groups that there's potential for welfare fraud and unethical behavior among state employees.

"This video reveal explosive evidence of the potential for fraud within Maine's Medicaid system," Weston said. 'It replaces what have been unverifyable anecdotes of welfare system abuse with a concrete example of unethical and potentially illegal behavior within Maine's welfare bureaucracy."

Lance Dutson, of the MHPC, says the O'Keefe video reinforces the center's long-held position that the state's welfare system is riddled with fraud and abuse.

"The real tragedy of waste, fraud and abuse in our social welfare programs is that it diverts much needed funding from our most vulnerable," Dutson said. "At a time when there is a limited amount of funding available for these programs, fraud like we saw here today takes services away from those who really need it. When an offshore drug dealer receives welfare benefits because he's hiding his earnings, a Maine family in real need is deprived of the safety net that the taxpayers sought to provide."

But while Dutson's example might be true in theory, DHHS Commissioner Mary Mayhew says that the actor in the video never received benefits. She says he was only given an application, and that Diane, a relatively new state employee in the Biddeford office, did exactly what she was supposed to do.

"This individual went and got a senior eligibility specialist to come back into the room," Mayhew said. "That senior eligibility specialist said, 'Your answers are evasive, you are not providing us with the information we need.' So it's a two-minute video out of a 45-minute interview. The governor has said when in doubt call your supervisor in. We need people to feel comfortable doing that. This individual did."

For his part, Gov. Paul LePage says he appreciates the video, he just would have preferred to have known about it in February. LePage says his administration's Fraud and Abuse Work Team has identified the need for better education and training of front line staff about fraud prevention.

LePage says the O'Keefe video primarily shows that an employee who wasted 43 minutes on an applicant who couldn't qualify for benefits needs additional training. "This individual is relatively new on the job and very pooly trained," he said. "We need to be far more more professional and we have to provide better training, and I take complete responsibility in that."

"Well, I think the video--first of all, it is just two minutes and I don't think it shows any fraud," says Sara Gagne Holmes, executive director of Maine Equal Justice Partners. Gagne Holes says the state's welfare case workers are over-burdened with requests for assistance from needy Mainers. Videos like O'Keefe's she says, do little to recognize the hard work of state employees.

Ben Grant, executive director of the Maine Democratic Party agrees, and says that conservative Republican groups like the Maine Heritage Policy Center and Americans for Prosperity are trying to exploit a fizzled sting attempt to convince Mainers that the state is riddled with fraud.

"What we have here is a political party that's desperate to show the people of Maine that there is fraud going on in Maine in many different arenas, and the simple fact is that they have no evidence, and there just isn't the type of rampant fraud that they are claiming there is," Grant says. "And it's just fear-mongering and scare tactics."

Gov. LePage said he has directed Commissioner Mayhew to look into the Biddeford incident and take corrective action.

EDITOR'S NOTE: A previous version of this story indicated that the actor portraying the welfare recipient was James O'Keefe. In fact, James O'Keefe produced the video but did not appear in it.